Elastic NV at Citi TMT Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Tyler Radke - Citibank Cameroon SA - Analyst : Great, it's a good overview. And I guess double clicking on the AI opportunity just for again, for those unfamiliar, like how do you -- it's a lot of different software companies talking about AI, you have application companies, some other infrastructure companies. How do you monetize AI today? How should investors kind of think about how AI impacts the numbers side of the equation?

Question: Tyler Radke - Citibank Cameroon SA - Analyst : Okay, great. And I think one of the unique parts of the Elastic story is, I mean, it's the product can kind of be interchangeably used across all those three use cases, meaning, you buy a subscription or consumption credits and you can use it across a wide range of use cases. I'm curious though, I mean, how do you think about opportunities also to amplify the product's reach, meaning like, yes, this is a great developer platform, but there are other vendors both in the search space, whether it's Glean on the AI side. Obviously, you have a number of observability and cybersecurity vendors that offer something a little more packaged out of the box and clearly, there's been a lot of rise of vibe coding startups that make developing software easier. Is there an opportunity to make this stuff easier to use and ultimately drive more consumption or just how do you think about that high level?

Question: Tyler Radke - Citibank Cameroon SA - Analyst : Okay, great. And as you think about that AI opportunity, I think it clearly is going to be a huge market early days, but there seems to be the opportunity both with AI natives, right? We're seeing a lot of these, obviously, you got the model providers, the vibe coding platforms, code generation startups, and then you have the enterprise building their own custom AI. Like how are you positioned in each of those segments?

Question: Tyler Radke - Citibank Cameroon SA - Analyst : Yeah, I think we're still ways away from using agents at a large bank.

Question: Tyler Radke - Citibank Cameroon SA - Analyst : For sure. Maybe there'll be an agent up here asking you questions next year, so better watch out. But Navam, I thought we'd bring you into this --

Question: Tyler Radke - Citibank Cameroon SA - Analyst : Yeah. Navam, I thought we'd bring you into the discussion here, just fresh off results, I think, kind of maybe your first full quarter as CFO. Pretty strong beat across the board, across both cloud and self-managed. I know there was a lot of questions around the price impacts in the quarter as well. So maybe just frame for us kind of the key puts and takes on the quarter from your perspective now that we're almost a week past when you released.

Question: Tyler Radke - Citibank Cameroon SA - Analyst : Right. And some of those efficiency capabilities that you highlighted, the searchable snapshot and some of the logging functionality, was there any like significant additions to the portfolio in Q1 or was this kind of more of a comment on like --?

Question: Tyler Radke - Citibank Cameroon SA - Analyst : Okay. Yeah, very clear. So you feel very good about the consumption growth in Q1, and I assume based on the raise of the year, you're expecting that.

Question: Tyler Radke - Citibank Cameroon SA - Analyst : Great. Yeah, super helpful. Speaking of sort of the changes between Q4 and Q1, I think you sounded a bit more upbeat on the macro environment. Maybe upbeat's a little strong of a word, but obviously the federal weakness that you saw in Q4 was pretty widespread across the software space. Like, just remind us, what did you see get better in Q1 versus Q4, both in federal and across other industries?

Question: Tyler Radke - Citibank Cameroon SA - Analyst : Right, but you would describe the guidance is still pretty prudent in terms of macro assumptions and everything?

Question: Tyler Radke - Citibank Cameroon SA - Analyst : Got it. Ash, I'd love to just ask you about the competitive landscape. Obviously, there's a lot of different areas that the Elastic product touches, everything from cybersecurity to observability and then search and AI with vector search. But yeah, there's certainly been a lot of kind of consolidation pressures, if you will, in both the security and observability market, whether it's budget constraints or open telemetry. How are you seeing that impact the elastic business, either positively or negatively?

Question: Tyler Radke - Citibank Cameroon SA - Analyst : Right. And I guess just as you think about sort of how to drive the durable growth of Elastic and this goal to be the embedded kind of platform within these emerging AI applications, obviously, top of funnel, developer affinity, those are, those are important things for the next generation. You did make the return to open source AGPL, I think over a year ago, if I'm not mistaken. Give us an update on how that's gone. What are what

Question: Tyler Radke - Citibank Cameroon SA - Analyst : Okay. Okay, great. And then Navam, on your end, we have an Analyst Day coming up in a little over a month. Obviously, you're still putting together the plans in terms of what you're going to share, but how are you just thinking about targets both on growth and profitability? Something the company has guided to in the past, you may have a different philosophy, but how should we be thinking about how you think about long term about the business, obviously without giving away too much ahead of Investor Day?

Question: Tyler Radke - Citibank Cameroon SA - Analyst : Okay, great. And I think I guess just go to market, I know we only have a couple minutes left, but a little over a year ago, you did make some changes there that proved to be more disruptive in the Q1 a year ago. But it seemed like you kind of bounced back from there. So just remind us, like, what were those changes, and have you started to kind of see the returns on some of those investments or changes that you made?

Question: Tyler Radke - Citibank Cameroon SA - Analyst : Great. Well, let's wrap it up there. I think we're out of time. Thank you both for the discussion and look forward to seeing you at the Investor Day.